You recently bought a car, and you feel you were wronged at some point in the transaction. You think you have a legitimate complaint, but your inquiries to the business you dealt with have produced no satisfactory response. Where do you go for help?

“It depends on what your issue is,” says Francis (Frank) Sullivan, chief director of the Consumer Protection and Antitrust Unit of the Wisconsin Department of Justice.

Sullivan explains that if your purchase was for a new car, you’d file a complaint with the Wisconsin Department of Transportation. If your complaint relates to buying a used vehicle, that same agency may be the place to go for help, or it might be the Division of Trade and Consumer Protection within the Wisconsin Department of Agriculture, Trade and Consumer Protection. But if your problem arose in financing your car, you’d take your complaint to the Wisconsin Department of Financial Institutions.

The upshot is that Wisconsin’s consumer complaint structure is complex, and it can be confusing to navigate, Sullivan points out.

“It’s complicated because we have an odd structure here in Wisconsin,” he says. “In most states, the attorney general’s office handles all consumer protection issues. So you might see national materials telling you to ‘Call your attorney general’s office if this happens to you.’ In just about every state except Wisconsin, that’s the right thing to do.”

In Wisconsin, the Department of Agriculture, Trade and Consumer Protection (DATCP), the Department of Financial Institutions (DFI), and the Department of Justice (DOJ) each have a specific function pertaining to consumer protection. These agencies also often work together to go to bat for Wisconsin’s consumers.

Telemarketing Issues Top DATCP’s List

The vast majority of Wisconsin consumer complaints enter the system through DATCP, which gets more than 100,000 contacts from consumers per year, or approximately 300 per day. Of that annual total, approximately 10,500 translate into formal written complaints, whether submitted online or on paper.

Still, “we’re not the sole portal for people to file a complaint,” says Frank Frassetto, administrator of DATCP’s Division of Trade and Consumer Protection. Of DATCP’s three staff attorneys, two help Frassetto’s division, along with occasional input from DATCP’s chief legal counsel.

“DOJ might get complaints that they look at and then turn over to us,” Frassetto explains. “Complaints also may come through police departments who give us a call and say, ‘Hey, we have this issue out there.’”

Of the written consumer complaints DATCP received in 2016, telemarketing issues ranked at the top of the list, numbering nearly 3,700, or about one-third of the annual total. Landlord/tenant complaints ranked second at roughly 1,100 complaints. “Those two issues are pretty much perennial,” Frassetto says. (See sidebar, “Top 10 DATCP Complaints for 2016,” for more statistics.)

Common themes running through all types of complaints are misrepresentations, failures to honor contracts, and inadequate disclosures. “Those are the underlying drivers,” Frassetto says.

One trend fueling telemarketing complaints is the rise in imposter scams. For instance, fake Internal Revenue Service agents call to threaten legal action if you don’t immediately pay taxes they claim you owe. Another common scam is the phony computer support technician who calls to say you must buy a security patch or software license.

These scammers “are sophisticated, and they play on emotions,” Frassetto says. “When people are thinking emotionally, they don’t think clearly. That’s a big challenge.”

Indeed, education is a key aspect of DATCP’s consumer protection work. “We’re constantly out giving presentations,” Frassetto says, “to law enforcement, social services agencies, financial institutions, Rotarians … and we’re always looking for new ways to get out the word in order to have an informed citizenry.”

Investigating Complaints

DATCP’s primary consumer protection function is to serve as an investigator. When a complaint comes into DATCP, the first question asked is whether the consumer has already contacted the company. That should always be a consumer’s first course of action, Frassetto emphasizes.

If the person has made such efforts, is still unsatisfied, and files a formal complaint, DATCP staff members then contact the entity the complaint is against and notify the consumer they have done so.

“We get both sides of the story,” Frassetto explains. “Then based on the facts we gather, we determine if the issue is within our authority or jurisdiction. Basically, we have to match it with a violation of some sort.”

One role DATCP plays is that of mediator. Often this results in an outcome that is satisfactory to all involved. Consumers who are still unhappy are advised they can pursue legal action on their own.

If DATCP determines the business or entity did commit a violation, it seeks to obtain a voluntary settlement. And sometimes DATCP’s legal staff sees grounds for further action.

“Somebody who’s a bad actor,” Frassetto notes, “is not going to work with us.” In such instances, DATCP confers with the DOJ or county district attorneys about the possibility of litigation. But, again, DATCP’s job is investigation, not litigation.

“At the end of the day, we’re not the final decision-maker as to whether a matter will be prosecuted,” Frassetto says. “We work closely with the DAs and DOJ because they’re our prosecution arm, but they may have other pressing issues” that bear on deciding whether to pursue a matter.

One recent example of legal action occurred against Going Places, which presented itself as a vacation membership club and operated under various names. DATCP received 15 complaints initially – not a high number, but each involved sizable dollar amounts.

“The bottom line was that the company was making false statements,” Frassetto says, “and failing to provide services to consumers who purchased these club memberships.” DATCP joined forces with the DOJ, and ultimately the company was ordered to pay $2.3 million in restitution, fines, and forfeitures.

As another example, complaints to DATCP about Chicago-based Legal Helpers, a debt settlement company, resulted in the DOJ initiating a lawsuit alleging the firm illegally collected millions of dollars in fees from Wisconsin consumers who were trying to get out of debt. After the case went to trial, Legal Helpers opted to settle on the third day, for $1 million. The consumers affected have received their restitution checks.

One of the key lessons learned in carrying out DATCP’s work is the need to stay on top of changes in the marketplace environment. How might those changes spur modifications in state statutes or DATCP’s departmental rules? How does the agency balance the need to avoid impeding the flow of transactions between consumers and businesses, and yet allow for adequate consumer protections?

“We try to balance that out,” Frassetto says, “and to foresee what’s coming down the pike and how we can make our authorities more robust. We have to constantly stay ahead of the curve.”

Wisconsin’s Financial Services Watchdog

Like DATCP, the DFI acts as a mediator, enforcer, and educator. The agency has eight attorneys on staff.

The DFI regulates state-chartered banks, savings and loans, savings banks, and credit unions, as well as various operations of the securities industry. It also registers and regulates the mortgage banking industry and other financial service providers such as loan companies. Plus, the DFI has a few other regulatory functions, as well.

Over the last three years, the DFI has received approximately 1,000 consumer complaints per year, according to George Althoff, communications director. Most of those are targeted at collections agencies, although in 2016 that number dropped to 199 from 289 in 2014. (See sidebar “Top DFI Complaints for 2014-2016” for more data.)

“Collections agencies by their very nature are involved in work that upsets consumers,” Althoff says. “Even if the agency has a legitimate reason to call, people may file a complaint with us.”

The DFI eventually finds that most complaints do not involve a violation of state law. When there is a violation, such as the collection agency calling the consumer outside the allowed hours, the DFI’s request to the business to stop that behavior is usually sufficient to get results.

The other three major categories of consumer complaints to the DFI include those against banks and credit unions (state-chartered only), mortgage bankers and brokers, and loan companies.

For most complaints, “we become the intermediary,” Althoff says. “We try to resolve complaints in the most sensible way to make sure consumers are not being harmed. If a business slips up and does something it shouldn’t do, we take care of it.”

For instance, once the DFI informs a bank that one of its customers has a problem – say a disputed overdraft fee – the bank usually is eager to contact the consumer and work out a solution. After all, banks have an interest in keeping their customers happy. In most matters, the DFI can obtain a good result just by getting the parties to talk with each other.

Sometimes, however, violations require more forceful action. The DFI does not take violators to court but turns to the DOJ to pursue that course of action, when necessary. The DFI does, however, have its own authority to enforce Wisconsin laws.

Earlier this year, for example, the DFI took action against Ocwen Financial Corp., an Atlanta-based mortgage servicing company. Ocwen services the mortgages of approximately 13,500 Wisconsin consumers and approximately 1.5 million consumers nationwide.

“In that case,” Althoff says, “we felt there was a pattern of activity that was not right for consumers.” Thus, in April 2017, the Wisconsin DFI’s legal team joined with the federal Consumer Financial Protection Bureau and more than 20 other state regulators to issue cease-and-desist orders against Ocwen subsidiaries.

These orders resulted from extensive examination and monitoring of Ocwen’s business practices and Ocwen’s unwillingness to cooperate with regulators to correct problems. Violations of state and federal laws included mismanaging consumers’ mortgage escrow accounts and operating unlicensed mortgage servicing facilities in some states.

A clear message that emerges from the DFI’s efforts to resolve consumer complaints, Althoff reports, is that financial literacy is critical. That’s why the DFI takes part in financial literacy efforts, such as spearheading the Governor’s Council on Financial Literacy.

“If consumers are informed and savvy,” he says, “they’re much less likely to encounter problems that result in a complaint to us.”

Litigating Complaints

The DOJ is “outside the mainstream of the Wisconsin consumer complaint structure,” says Sullivan, chief of the DOJ’s Consumer Protection Unit, which has six attorneys. “We are not the primary complaint agency.”

Still, the DOJ does receive complaints directly from consumers. In such instances, “we have expertise in figuring out where people should go,” Sullivan says. That may mean steering someone to the DFI or DATCP, or perhaps some other entity. Sometimes a matter comes back to the DOJ for litigation, which is the agency’s primary function in battling for consumer protection.

“When a case gets referred over here, it’s a serious issue, often with big dollars at stake,” Sullivan says. “If someone needs to be sued, DATCP and DFI don’t have that authority. So the matter comes to our shop, and we sue. We’re the hammer.”

Every year, the DOJ files a fair number of cases, but few go to trial, according to Sullivan. “Most of our litigation resolves pretrial, although often pretty close to trial,” he says. “I think that’s true of most litigations generally.”

One of the DOJ’s most recent filings on behalf of Wisconsin consumers is that against Vision Property Management. The Columbia, S.C.-based company buys large blocks of distressed, often condemned, properties and then turns around to market them to consumers, including in Wisconsin. “The marketing is misleading,” Sullivan says, “and plays to the American dream of home ownership.”

To sell these properties, the company uses a complex rent-to-own model. The properties are cheap, but the consumer is responsible for making improvements to bring the property up to code. The DOJ’s position is that the model makes it extremely difficult for people to ever acquire ownership.

“We and DATCP and DFI believe the model they’re using is illegal,” Sullivan says. Vision Property Management has been perpetrating this scheme nationwide. In early June of this year, Wisconsin became the first state to file a lawsuit against the company.

Acting on the State’s Behalf

The Vision case is an example of how the DOJ becomes aware of scams and fraud by means other than direct consumer complaints. In that instance, the Green Bay city building inspectors “went after the company hammer and tongs,” Sullivan says, and a Green Bay television station picked up the story. The matter came to the DOJ’s attention when a Legal Aid of Wisconsin staffer contacted a DOJ attorney.

Besides working with other state agencies to pursue legal action, the DOJ sometimes teams up with federal agencies and others. Take, for instance, a complaint the DOJ received about a “hostage mover” scam, in which a company moves someone’s household belongings for a fee and then asks for more money before it will release the items. In one such case, Sullivan’s staff worked with a division of the U.S. Department of Transportation and the Florida attorney general’s office to get a consumer’s belongings that were being held hostage in a storage facility near Chicago’s Midway International Airport.

Still, “by statute we can’t be the private attorney for every citizen who has been ripped off,” Sullivan emphasizes. “When we file an action against a company we believe has violated Wisconsin law, we’re doing so on behalf of the state of Wisconsin, not Joe Smith or Jane Jones. We have to figure out where we can get the most return for our investment of staff time and litigation resources.”

Which circles back to the way the Wisconsin consumer complaint system operates. When the DOJ can’t act on a complaint, it tries to steer the consumer in the right direction.

“Bad things happen to people,” Sullivan says, “and they need a structure that’s responsive. The biggest lesson I’ve learned is that we have to make it easy for people to get into the system. If we get a complaint and it’s one we can act on, we’ll do that. If we can’t, we get people to where they need to go.”